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TTB rolls out new rules for distilleries, wineries and breweries

April 27, 2020

The federal Alcohol and Tobacco Tax and Trade Bureau, fondly known as TTB, issued final rules that contain a few game-changers for the alcoholic beverage manufacturing industry.

We are particularly fond of the greater flexibility offered to distilleries. Distilleries can now count the years bourbon or whisky are aged in used barrels.  Previously, a whisky or bourbon could only list the number of years aged in new oak barrels.

“You can innovate, but not get punished for aging in an unconventional barrel,” observed Waller’s whisky lawyer to the stars, Rob Pinson.

Under the new rules, whisky aged for 4 years in new barrels, and an additional 3 years in used rye barrels, can be called 7-year-old whisky.  Previously, it was 4-year old-whisky.

The most controversial proposal did not make the final cut.  TTB did not attempt to define what constitutes an “oak barrel.”

In the past, we understand that industry member posed lots of questions about barrels:  Can I use square barrels?  Can I use 35-gallon barrels?  Does the barrel have to bulge in the center? TTB did not limit the type of barrels by specifying the shape and size of barrels used for aging.

In another nod to innovation, distilleries now have more stylistic freedom for labeling. In the past, the front label had to contain all of the information required by TTB. Now, a distillery can put a simple bold logo on the front, for example, with the required label information on the side or back of the bottle.  This will enable greater creative flexibility in graphic design, and potentially with bottle design.

Another big plus for the industry is doubling the threshold for errors in determining the proof for spirits. Distilleries generally add water as a final finishing phase of the distillation process. This is generally done right before bottling.

TTB previously required that the amount of alcohol in the bottle - say 80 proof (which equates to 40% alcohol) - had to be within 0.15% of the amount of alcohol stated on the label.

TTB audits distilleries and tests for the accuracy of alcoholic content. If a batch of spirits was off more than 0.15%, TTB often requires that the distillery dump the entire batch, reproof the spirits and re-bottle. What a pain.

Now distilleries have twice the margin of error when proofing. We see this as a big boost for the industry, while not having any impact for consumers. Even the most polished palate probably cannot detect a difference of 0.15% in alcoholic content.

On a personal note, we are looking forward to continued innovation for vodka. Castle & Key has quickly become our favorite, shaken over ice. Previously, the definition of vodka required that the spirit be “without distinctive character, aroma, taste or color.” 

Castle & Key has complex but subtle mash notes that make cocktail hour quite delightful. We look forward to distilleries crafting more innovative vodkas for our happy hours.

For those that are having trouble sleeping during the coronavirus pandemic, here is a complete copy of the TTB rules

Federal licensing expert Rob Pinson provides a handy summary below.  Keep cocktailing.

The TTB recently released final regulations related to Alcoholic Beverage Labeling and Advertising.  Here is a quick timeline for these new final regulations:

  • 11/28/2018 - Proposed Rule issued
  • 4/1/2020 - Final Regulations issued
  • 5/4/2020 - Effective date of new regulations

The final regulations address some issues currently and defers others for further consideration.  Overall, they provide greater flexibility for the industry.  There were 1,143 total comments, with over 700 of those expressing opposition to the proposed definition of a barrel as a 50-gallon cylindrical container. The only negative result that we see is that distillers cannot count each plate as a distillation on their labels.

Brief Summary of Changes

  • Doubles to +/- 0.3% the tolerance applicable to alcohol content statements on distilled spirits labels
  • Removes the current prohibition against age statements on pretty much all classes of distilled spirits except vodka
  • Removes prohibition on use of term “strong” and other similar indications of strength for malt beverages
  • Adds limit on how producers “count” the number of distillations when making “Distilled      times” claims

What TTB Is Not Changing

  • Definition of “oak barrel” - they are confirming different shapes and sizes are permitted
  • Setting restrictions on cross-commodity terms, including homophones of class/type
  • Setting restrictions on disclosing components of intermediate products or listing ingredients in order of predominance
  • Requiring the age statement for spirits to only include the initial barrel; age can include subsequent barrels
  • Requiring whiskey that meets more than one specific type to be labeled as such - for example, straight bourbon whiskey vs. bourbon whiskey
  • Incorporate interaction between TTB and FDA when product is deemed “adulterated” by FDA and/or “mislabeled” by TTB

Specific Changes - All Commodities

  • Clarifies which products do and do not meet FAA definitions of wine, spirits or malt beverage and which labeling regime applies to them
  • Confirms that product exported outside of US in bond does not need to meet FAA labeling requirements
  • Personalized Labels (as opposed to private labels)
  • Incorporates prior guidance into regulations; allows producer to submit template label and not get each private label approved
  • Cannot discuss alcoholic beverage or characteristics of alcoholic beverage in personalized portion; remainder of label must have bare minimum
  • Examples are provided
  • Advertisements - modifies existing rule requiring publication of name and street address (city and state only) of industry member running an advertisement to permit websites, email or phone number in lieu of street address

Specific Changes - Wine Only

  • Removes citrus wine class and combines it with fruit wine (since citrus is a fruit, of course!)
  • Allows vintage dates on wine that is imported in bulk
  • Provides that all wine must meet standard of “natural wine”; more about cleaning up existing regulations

Specific Changes - Spirits Only

  • Definition of “distilled spirits” does not include products containing less than 0.5% ABV
  • ** Will not establish definition of “oak barrel”; confirms current language allows for different shapes and sizes
  • Clarifies requirement for statements of age and origin for imported products
  • Will not require disclosure of intermediate ingredients on labels nor require listing of ingredients in order of predominance
  • ** Liberalizes placement of key brand label information (brand name, class/type, alcohol content) to be on any side of bottle as long as it is in the same “field of vision”; net contents can be on any label now instead of only be allowed on front label
  • Keeps ‘bottled in bond’ requirements with change for gin to allow paraffin-lined or unlined barrels; vodka retains paraffin-lined requirement
  • ** Increases alcohol content tolerance from +/- 0.15%  ABV to +/- 0.30% ABV
  • Allows age statements for all spirits except neutral spirits and vodka
  • ** Confirms that multiple barrels can be used for “age counting." While using different barrels may change the type/class of your product, you are allowed to add all time in barrels when putting an age statement on the label. For example, if you take straight bourbon whiskey, aged 5 years, and age it in used port barrels for two years after that, the product becomes a distilled spirit specialty, but you can call it "straight bourbon whiskey aged in port barrels" and list it as "Aged 7 years."
  • ** Defines a distillation as a single column of a column still or a single run through a pot still. This means that, going forward, distilleries cannot include each plate distillation as a distillation when listing the number of times product is distilled. The number listed may be understated but not overstated.
  •  Creates new “agave spirits” class, of which tequila and mescal are a part; removes need to submit formula; at least 51% of mash must be agave and up to 49% can be sugar
  • ** Revises vodka definition to remove the “without distinctive character, aroma, taste or color” and be distinguished by its specific production standard - no aging and limited sugar and citric acid
  • Country of Origin - Since Customs & Border Patrol (“CBP”) already has regulations on listing the country of origin, the TTB is removing its similar requirements for distilled spirits and referring to CBP’s requirements
  • ** Makes optional the use of a more specific type name when a class name also applies - for example, not required to use the ‘straight’ for bourbon whiskey even though it qualifies
  • Defers creating a standard of identity for absinthe, but does remove the lab testing requirement for products made with wormwood

Specific Changes - Malt Beverages Only

  • Permits brewers to also add ABW information on label as long as it is together with ABV
  • Removes restrictions on “draft” or “draught” on labels
  • Removes restrictions on “strong”, “full strength”, “extra strength”, etc. on labels

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